The Good ‘Ol Days of the Personal Income Tax

You may have heard people refer to the 1950’s as a great decade, a decade of prosperity and high employment. You may also have heard a politician or two, as well as religious leaders, talk about “getting back to the values of the 1950’s”.

One thing is for certain – the federal government had plenty of tax revenue to work with in terms of providing scientific research, transportation infrastructure, etc.

Just take a look at the progressive tax rates for personal income tax for unmarried taxpayers per income bracket in the 1950’s:

The 1954 Code

Income level

Tax rate

2008 PPC Adjusted Income

up to $2,000.00

20%

up to $37,500.00

$2,000.01 – $4,000.00

22%

$37,500.01 – 75,000

$4,000.01 – $6,000.00

26%

$75,000.01 – 112,500

$6,000.01 – $8,000.00

30%

$112,500.01 – 150,000

$8,000.01 – $10,000.00

34%

$150,000.01 – 187,500

$10,000.01 – $12,000.00

38%

$187,500.01 – 225,000

$12,000.01 – $14,000.00

43%

$225,000.01 – 262,500

$14,000.01 – $16,000.00

47%

$262,500.01 – 300,000

$16,000.01 – $18,000.00

50%

$300,000.01 – 337,500

$18,000.01 – $20,000.00

53%

$337,500.01 – 375,000

$20,000.01 – $22,000.00

56%

$375,000.01 – 412,500

$22,000.01 – $26,000.00

59%

$412,500.01 – 487,500

$26,000.01 – $32,000.00

62%

$487,500.01 – 600,000

$32,000.01 – $38,000.00

65%

$600,000.01 – 712,500

$38,000.01 – $44,000.00

69%

$712,500.01 – 825,000

$44,000.01 – $50,000.00

72%

$825,000.01 – 937,500

$50,000.01 – $60,000.00

75%

$937,500.01 – 1,125,000

$60,000.01 – $70,000.00

78%

$1,125,000.01 – 1,312,500

$70,000.01 – $80,000.00

81%

$1,312,500.01 – 1,500,000

$80,000.01 – $90,000.00

84%

$1,500,000.01 – $1,687,500

$90,000.01 – $100,000.00

87%

$1,687,500.01 – $1,875,000

$100,000.01 – $150,000.00

89%

$1,875,000.01 – $2,812,500

$150,000.01 – $ 200,000.00

90%

$2,812,500.01 – $3,750,000

$200,000.01 or more

91%

$3,750,000.01 or more

Wow! Twenty-four income brackets with corresponding marginal tax rates from 20% to 91%. Can you imagine if those tax rates were in effect now?

6 thoughts on “The Good ‘Ol Days of the Personal Income Tax”

And what did Mitt Romney pay in income tax? It was about 15%, wasn’t it? And Warren Buffet pays less than that. Thanks to the “common-sense tax reforms” Reagan started and Bush finished. It wasn’t reform, it just lowered the tax rate on the really wealthy people. We would have no deficit if we went back to the income tax rates of 1954.

Really puts the current budget and deficit problems in perspective. The push to reduce taxes on the wealthy to a fraction of what those were historically is killing the long-term economic health of the U.S.